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Cost Models for Two-Dimensional Warranties

In: Warranty Data Collection and Analysis

Author

Listed:
  • Wallace R. Blischke
  • M. Rezaul Karim

    (Rajshahi University)

  • D. N. Prabhakar Murthy

    (The University of Queensland)

Abstract

Multi-dimensional warranties usually involve a time dimension (similar to that in one-dimensional warranties) and one or more usage dimensions. There are several notions of usage. We confine our discussion to two-dimensional warranties where the warranty is characterized by a rectangular region under which the warranty expires when the item reaches an age W or the usage reaches a level U, whichever comes first. The cost analysis is a more difficult than that of one-dimensional warranties. For 2-D warranties, failures are random points scattered over the two-dimensional warranty region as opposed to being random points along the time axis in the case of one-dimensional warranties. We discuss the three different approaches that have been proposed for modeling failures and warranty claims. Costs depend not only on failures but also on several other factors. We discuss these and derive cost models for some simplified cases.

Suggested Citation

  • Wallace R. Blischke & M. Rezaul Karim & D. N. Prabhakar Murthy, 2011. "Cost Models for Two-Dimensional Warranties," Springer Series in Reliability Engineering, in: Warranty Data Collection and Analysis, chapter 0, pages 137-157, Springer.
    • Handle: RePEc:spr:ssrchp:978-0-85729-647-4_7
    DOI: 10.1007/978-0-85729-647-4_7
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    Cited by:

    1. Wei Xie, 2017. "Optimal pricing and two-dimensional warranty policies for a new product," International Journal of Production Research, Taylor & Francis Journals, vol. 55(22), pages 6857-6870, November.

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